Skip to content

Privacy: the price of relevancy

November 21, 2008

This oped piece was published in the September 2008 issue of Direct Marketing (www.dmn.ca)

Privacy: the price of relevancy – by Miro Slodki

Marketers tend to universally accept that a consumer response will be triggered when the offer/communication reaches some requisite level of relevance with the consumer. How that relevance is defined is open to debate – but believers will point to price as one of the final arbitrators of relevance and specificity (right time/right place) as the other critical variable.

Ironically, just as we gain access to new channels/media/technologies that allow marketers to become ever more pervasive and ‘relevant’ we also stand at the fringe of an environment that has the makings of a perfect storm which can potentially redefine a brand’s value proposition in ways we might not appreciate.

Setting aside the other elements of the marketing mix – many people will argue that as a consumer gets closer to the final purchase tipping point, the most powerful element in the relevancy matrix will be price. An ‘uncompetitive’ price, it is argued, cannot be overcome by ‘marketing’ – at least not in the span available to marketers trying to keep pace with their short term budget commitments. So, irrespective of all other marketing supports, and whatever else we may think about the spiritual cleanliness of organically grown demand – discount price management is the trump card used most often to justify or anchor a “relevant event.”

Paradigm shift

The paradigm shift is that these new channels/media/technologies give marketers a virtually infinite supply of opportunities within which to communicate relevancy. Marketing 101 tells us that pricing is a key signal for consumers. Used judiciously, it is an invitation to a purchase — conveying information about the brand’s value proposition and anchoring it in the consumer’s mind on terrain wherein the brand seeks to compete. Psych 101 warns us that pigeons (and humans) are adept at stimulus-response learning, hence the connection of ‘relevant offers’ may become linked to inadvertent messaging about the brand’s de facto price proposition, which is but a short step away from potentially undermining the brand’s core value proposition.

Consumers also have something at stake in this dynamic. In exchange for some loss of anonymity, many seek or expect to gain more personalized and relevant (there’s that word again) offers and experiences. Until now, this has largely been a conscious, tacit choice as consumers become used to the idea that “cookies are our friends.” But as the technology escalates, we may begin to witness greater consumer reluctance about ‘sharing’ personal information. This likely will not arise from any particular sense of propriety – it will be a matter of principle and recognition of the increasing value of the digital footprint.

Government intervention

Advertising channels themselves are starting to raise these questions, as evidenced by this letter from AT&T in response to US Congress probes:

Advertising-network operators, such as Google, have evolved beyond merely tracking consumer Web surfing activity on sites for which they have a direct ad-serving relationship. They now have the ability to observe a user’s entire Web browsing experience at a granular level, including all URLs visited all searches, and actual page-views. Techniques include the ad network ‘dropping’ third-party tracking ‘cookies’ on a consumer’s computer to capture consumer visits to any one of thousands of unrelated websites; embedding software on PCs; or automatically downloading applications – that unbeknownst to the consumer – log the consumer’s full session of browsing activity.

However this plays out, the final arbitrator has been and will always be the consumer.

Government bodies are stepping up to help draw lines in the sand on the issue of privacy but in the same way that the gasoline price run-up hit a behavioral threshold when US prices reached $4/gal, these actions will at some point trigger a consumer response. The same technology that enabled Behavioral Targeting (BT) will be used to disable it. All major browsers (Safari, Mozilla and IE) have or will soon have stealth mode functionality to address the desires of those wishing to make their Web activity invisible to the collectors.

The push and pull of progress leaves us at a new crossroads where the value of relevancy is still supreme but like the Arthurian Grail, just beyond one’s reach. Despite the possible ‘setback’ for marketers, I think it will likely save a lot of brands from self-immolation and enable them to re-channel their efforts back into the creation of meaningful dialogue with one’s customers/partners bound together on a journey for share of life.

To review a framework which might assist you in better balancing the components of your brand’s matrix leading to greater customer relevancy – please visit The Anatomy of a Brand Purchase

Sources:

Google Privacy Practices Worse Than ISP Snooping, AT&T Charges

http://blog.wired.com/27bstroke6/2008/08/google-privacy.html

Reblog this post [with Zemanta]
Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: